New law firms spur job hopping among lawyers

Out-of-state firms flocking here spur fight for top lawyers

Ian Faria and Jim Collura pose for a photo at their new law firm, Bradley Law Firm, on Tuesday, March 21, 2017, in Houston. They left Coats Rose in October to join Bradley, a Birmingham, Ala., based firm to open an office in Houston. ( Brett Coomer / Houston Chronicle ) less

Ian Faria and Jim Collura pose for a photo at their new law firm, Bradley Law Firm, on Tuesday, March 21, 2017, in Houston. They left Coats Rose in October to join Bradley, a Birmingham, Ala., based firm to ... more

Photo: Brett Coomer, Staff

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Ian Faria, left, and Jim Collura left Coats Rose to open a Houston office for Birmingham, Ala.-based Bradley, one of about two dozen firms that have opened offices here in the past five years.

Ian Faria, left, and Jim Collura left Coats Rose to open a Houston office for Birmingham, Ala.-based Bradley, one of about two dozen firms that have opened offices here in the past five years.

Photo: Brett Coomer, Staff

New law firms spur job hopping among lawyers

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Jim Collura, a longtime partner in Houston law firm Coats Rose, wasn't looking for another job. But after working on a case with lawyers from Bradley, the Alabama law firm asked him to help open its office in Houston, offering him more money, greater opportunities to move into top management and a work culture that felt right.

Collura persuaded another partner, Ian Faria, to join him, and within 48 hours, six more Coats Rose lawyers, three secretaries and two paralegals tendered their resignation and took jobs with Bradley. When the Houston office opened in October, it was the ninth in the United States for the Birmingham-based firm, which has about 550 lawyers nationwide.

"We were very happy where we were," said Collura. "But we're happier now."

Local lawyers are doing a lot of job hopping these days, as out-of-state firms like Bradley flock to establish footholds in the nation's fourth largest city and recognize that Houston, with its global energy hub, 25 Fortune 500 companies and the world's largest medical center, is a place they need to be if they want to grow in the increasingly competitive market for legal services. Law firms today are facing the same challenge as cellphone providers: the market is saturated and the only way to grow is to take business from competitors.

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As a result, Houston and its lucrative market - mergers and acquisitions handled by local lawyers last year topped $100 billion - have become a particular target for national and international firms. About two dozen firms from around the globe have opened Houston offices in the past five years, according to data collected by the legal industry recruiting firm Major, Lindsey & Africa. Newcomers include Polsinelli of Kansas City, Holland & Knight, which got its start in Florida, and Eversheds of London, which gained a Houston office when it merged with Sutherland Asbill & Brennan.

Booming economy

The out-of-state firms are siphoning work - from mergers and acquisitions to bankruptcy restructuring - largely by recruiting partners, like Collura, who have strong books of business and loyal clients who will follow them, industry analysts said. Texas-based firms reported that billable hours fell 7 percent last year, according to Citi Private Bank, a unit of the New York financial services company Citigroup.

"When one firm grows, it's at the expense of another," said Gretta Rusanow, head of advisory services for Citi Private Bank's law firm group. "They're taking talent from some of those (Texas) firms and building out their offices."

The parade of out-of-state law firms to Houston began in earnest about a decade ago as the Texas economy established itself as one of the nation's fastest growing, expanding about twice the rate of the national economy over that period. George Hittner, a managing director at Major, Lindsey & Africa, noted the companies almost daily announce that they are relocating or expanding in Texas and all those need lawyers.

"The Texas economy is just booming," he said.

One of the most recent arrivals is Gibson Dunn, a 1,300-lawyer firm that started in Los Angeles and announced in February it was opening an office here to expand its energy practice. Last month, Gibson Dunn poached two top lawyers from local firms, Michael P. Darden, the former global head of Latham & Watkins' oil and gas transactions practice and Justin T. Stolte of Apache Corp. Five more partners are expected to join soon but haven't yet finished winding down their practices at other firms.

Rob Walters, managing partner for the Dallas office of Gibson Dunn, said the firm had its eye on Houston for years. But it was willing to wait until it could attract a "truly elite group" with expertise in energy-related capital markets, mergers and acquisitions and master limited partnerships - and long lists of good-paying clients.

"Over the last six months, the stars lined up," he said.

Another is Orrick, a global firm that started in San Francisco. Orrick last year entered the Houston market with a bang, hiring away 20 partners from local firms to expand its energy, technology and finance practices.

"If you are focused on energy, technology or finance," said Mitch Zuklie, chairman of Orrick, " I don't see how you can't be in Houston."

'A game of thrones'

While the competition for talent has meant healthy paydays for partner-level attorneys, it hasn't translated into more jobs for law school graduates.

The top students at the top schools continue to be recruited heavily, but overall hiring remains flat. At the University of Texas School of Law, for example, about 80 percent of the class of 2016 landed full-time jobs that require passage of the bar exam, slightly better than the placement rate a year earlier.

"Top firms, such as the ones expanding into Houston, have particular, if unspoken, hiring criteria about how deep into a graduating class of any law school they will go," said Christopher Roberts, spokesman for the University of Texas School of Law.

Many Texas-based firms are holding their own against the onslaught from out of state. Vinson & Elkins, a Houston firm that traces its local roots back a century ago was the No. 1 deal-maker in Texas last year with 109 merger and acquisition deals valued at $91.8 billion, according to The Texas Lawbook. Vinson & Elkins is also doing its own poaching, hiring 18 partners away from eight firms last year, including Akin Gump and Bracewell. Part of Vinson & Elkins pitch: Profits per partner exceeded $2 million last year.

"It's soothing to someone looking to move," said the firm's chairman Mark Kelly.

Brad Chambers, managing shareholder of the Houston office of Baker Donelson, a firm that got its start in Tennessee, said he gets a call or email at least once a week from an out-of-state firm interested in opening an office in Houston and having him come aboard. Chambers, who said he plans to stay put, said he takes the calls for competitive insight into which firms may enter the Houston market.

As the influx of national and international firms to Houston spurs lawyers to jump from firm to firm, legal specialists have compared the constant movement to a game of musical chairs. Chambers suggested another analogy from a television series about competing clans battling to rule a kingdom: "A game of thrones."